It will cost West Virginia nearly $23 million a year to comply with a Supreme Court ruling to expand military service credits for public employees’ pension benefits, according to a report released Wednesday by the state Consolidated Public Retirement Board’s actuary.
In March, the state Supreme Court ruled that the retirement board had wrongly denied military service credit to many public employees by failing to give credit for armed conflicts not specifically cited in state law, including conflicts in El Salvador, Lebanon, Grenada, the Persian Gulf War and Somalia.
Two months later, the retirement board agreed to comply with the court’s decision and give up to five years credit toward pensions for public employees and retirees who had served in the military during those conflicts.
On Wednesday, actuary Harry Mandel told the board the additional pension benefits will create a $197.2 million unfunded liability in the Public Employees Retirement System, which will require employers to come up with an additional $22.8 million a year in premiums for 20 years.
“What you’re telling us is, the Supreme Court decision is going to increase the cost of employment benefits by 1.5 percent a year for 20 years,” said David Wyant, the retirement board’s chairman.
Mandel’s study projects that active state, county and municipal employees covered by PERS will be eligible for a total of $113.9 million in increased pension payments, while retirees will be entitled to about $43.6 million in increased pensions.
Retirees will also receive a total of about $33.4 million in back payments to cover pension underpayments dating back to June 2000. Those retirees will also get about $6.3 million in interest payments, at a rate of 4 percent interest for the years their pensions were under-calculated.
Under state pension law, employees and retirees covered by PERS can get up to five years credit for military service during armed conflicts.
Mandel’s report did not specify exactly how many PERS active employees and retirees will qualify for additional pension benefits.
Jeffrey Fleck, the retirement board’s executive director, said he is drafting a letter to go out to PERS participants advising them of the benefit changes. He said a toll-free hotline will be set up for PERS members who have questions about their eligibility and about applying for the additional military service credit.
Also Wednesday, Consolidated Public Retirement Board members voted to terminate the pension of former Mingo County circuit judge Michael Thornsbury for less than honorable service. That erases 16 years, 7 months of credit in the Judicial Retirement System and 2 years, 2 months credit in the Public Employees Retirement System for Thornsbury.
Judicial pensions are equal to 75 percent of the salary of active circuit court judges. At the current salary of $126,000, that means the retirement board’s action Wednesday terminates what would have been a $94,500 annual pension for Thornsbury.
Thornsbury pleaded guilty last month to conspiring to deprive a man of his constitutional rights. As judge, he approved of a scheme to offer a man facing drug charges a lighter sentence, if the man would stop talking to federal investigators about the Mingo County sheriff, a political ally of Thornsbury.
Reach Phil Kabler at firstname.lastname@example.org or 304-348-1220.